Should You Buy a Used Rental Car?

Hertz is one of several car rental companies to offer its cars for sale. Buyers beware: You should have a qualified mechanic with no stake in the sale check out the car before you sign the dotted line. Justin Sullivan/Getty Images

If you've ever rented a car, you might have driven it a little harder than you'd drive your own car. And, chances are, many other customers who rented it were just as "respectful" of that car as you were. So, the thought of owning that car after the rental car company's done with it might be a little scary.

If you're shopping for a later-model used car on a budget, though, this is an avenue you might want to consider. Rental car companies rotate their fleets on a regular basis, which means there's a steady supply of older cars they're looking to unload. Many of these cars end up at auctions where dealers often buy them and resell them on their lots. But some companies, like Hertz and Enterprise, will also sell former rentals directly to individuals.

Brian Cayle, an expert in buying and selling used cars through various sources, has extensive experience working with dealerships, auctions and fleet management. He says that when shopping for a used rental car, you should be as cautious as when negotiating any other deal.

"There are pros and there are cons," says Cayle. "It can be very, very good, and it can range to very, very bad."

The Good

First, let's take a look at the pros of buying a used rental car. In the interest of quick and easy sales, rental car companies often price their cars lower than comparable used cars, though you'll still want to compare these prices against your local dealership and private-party listings, as well as Kelley Blue Book's valuation guide. Rental companies have a lot of cars to sell, and want to make the process as hassle-free as possible. Full inventories are listed on their websites with no-haggle pricing. Some companies, like Hertz and Budget, even let you take cars on overnight test drives.

And since rental car companies rotate fleets so frequently, you'll find that many cars are just a few years old. That means that in most cases, some of the original manufacturer's warranty will remain, and will transfer to the new owner. In some cases, you can also buy an extended warranty for extra protection.

As with any car shopping experience, you can run a Carfax report to check out the car's history, or the company might be able to provide one. Here, you want to confirm that the rental company is the car's only owner and that there are no accidents on the car's record. While you're at it, check the recall database at SaferCar.gov to see if the car has any outstanding recalls.

In addition to the high inventory and lower cost, you can trust that the rental company probably kept up with basic maintenance. But without a complete and valid service documentation, you're still at the mercy of what the rental car company tells you — just as in any other used car deal.

The Bad

Now let's take a look at the cons. Rental companies often order new cars in high volume for time and cost savings. Generally speaking, these run-of-the-mill compact and midsize sedans are going to be as simple as possible. That saves money and means there are fewer components that the customers can break and can even generate extra revenue. (Do you think they could charge extra to rent an aftermarket GPS system if the car had navigation built in?) So keep in mind that if you like the latest features or prestigious trim levels, a former rental might not be right for you.

Also consider maintenance. While most rental companies maintain their fleets regularly, lot managers do often skip or delay required upkeep because if the cars aren't on the road, they're not making any profit. And even when the cars are being maintained, they aren't necessarily getting the best quality care. "[The companies] know they're only going to have the car for a short amount of time," says Cayle, so they often skimp on some things, or may go the cheap route with products like oil. Cayle says he's seen former rental cars up for sale riding on three matching name-brand tires and one off-brand tire. Sub-par body work is common, too.

"They get bumped, they get bruised, they're not going to be sent to the best body shop," he says. This is especially important to look for because not all damage gets reported, which means some accidents also might not show up on a Carfax check.

If you're adamant about buying a used rental, one of the best ways to avoid ending up with a dud is to have it an expert inspect it. Cayle recommends taking it to a mechanic who has no stake in the potential sale (in other words, he won't earn or lose money depending on the outcome) and paying a flat fee for the diagnostic.

And some buyers just can't get over the fact that the car has been around the proverbial block. As Cayle says, "Good news: it was one owner. The bad news: it was 400 drivers over the course of that year."

To put it simply, buying a former rental car is just like buying any used car, in that it's up to you to protect yourself. Deciding whether to buy a used rental car depends on how much you can learn about the car, and your own level of comfort with the remaining unknown factors.

Now That's Interesting

If you need to save even more money on your next car, or if you have a higher tolerance for the unknown, consider checking out the auction circuit. Auction prices tend to be even lower than used rental sales, but the cars' quality is more of a gamble. In fact, many used rental cars are deemed unfit for regular sale, and the rental companies send these unwanted vehicles off to auctions just to get rid of them.